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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to                 

Commission File Number 001-39275

 

APi Group Corporation

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

 

98-1510303

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

1100 Old Highway 8 NW

New Brighton, Minnesota

 

55112

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code: (651) 636-4320

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

 

APG

 

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

Smaller reporting company

 

 

 

 

 

 

 

 

  

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: 201,734,317 shares of Common Stock as of August 4, 2021.

 

 

 


 

 

TABLE OF CONTENTS

 

 

 

2

 


 

 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

APi Group Corporation

Condensed Consolidated Balance Sheets (Unaudited)

(In millions, except per share data) 

 

 

June 30,

2021

 

 

December 31,

2020

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

686

 

 

$

515

 

Accounts receivable, net of allowances of $4 at June 30, 2021

     and December 31, 2020

 

 

664

 

 

 

639

 

Inventories

 

 

69

 

 

 

64

 

Contract assets

 

 

184

 

 

 

142

 

Prepaid expenses and other current assets

 

 

82

 

 

 

77

 

Total current assets

 

 

1,685

 

 

 

1,437

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

348

 

 

 

355

 

Operating lease right of use assets

 

 

105

 

 

 

107

 

Goodwill

 

 

1,079

 

 

 

1,082

 

Intangible assets, net

 

 

912

 

 

 

965

 

Deferred tax assets

 

 

87

 

 

 

89

 

Other assets

 

 

27

 

 

 

30

 

Total assets

 

$

4,243

 

 

$

4,065

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Short-term and current portion of long-term debt

 

$

13

 

 

$

18

 

Accounts payable

 

 

180

 

 

 

150

 

Contingent consideration and compensation liabilities

 

 

25

 

 

 

41

 

Accrued salaries and wages

 

 

151

 

 

 

182

 

Deferred consideration

 

 

 

 

 

67

 

Other accrued liabilities

 

 

100

 

 

 

133

 

Contract liabilities

 

 

232

 

 

 

219

 

Operating and finance leases

 

 

29

 

 

 

31

 

Total current liabilities

 

 

730

 

 

 

841

 

 

 

 

 

 

 

 

 

 

Long-term debt, less current portion

 

 

1,457

 

 

 

1,397

 

Contingent consideration and compensation liabilities

 

 

2

 

 

 

22

 

Operating and finance leases

 

 

81

 

 

 

96

 

Deferred tax liabilities

 

 

46

 

 

 

45

 

Other noncurrent liabilities

 

 

99

 

 

 

106

 

Total liabilities

 

 

2,415

 

 

 

2,507

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

Preferred Shares, $0.0001 par value, 7 authorized shares, 4 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

 

 

 

 

 

 

Common shares, $0.0001 par value, 500 authorized shares, 201 shares and 168 shares issued at June 30, 2021 and December 31, 2020, respectively (includes 12 shares declared for stock dividend at December 31, 2020)

 

 

 

 

 

 

Additional paid-in capital

 

 

2,105

 

 

 

1,856

 

Accumulated deficit

 

 

(271

)

 

 

(284

)

Accumulated other comprehensive loss

 

 

(6

)

 

 

(14

)

Total shareholders’ equity

 

 

1,828

 

 

 

1,558

 

Total liabilities and shareholders’ equity

 

$

4,243

 

 

$

4,065

 

 

See notes to condensed consolidated financial statements.

3

 


 

APi Group Corporation

Condensed Consolidated Statements of Operations (Unaudited)

(In millions, except per share amounts)

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net revenues

 

$

978

 

 

$

889

 

 

$

1,781

 

 

$

1,747

 

Cost of revenues

 

 

746

 

 

 

715

 

 

 

1,368

 

 

 

1,411

 

Gross profit

 

 

232

 

 

 

174

 

 

 

413

 

 

 

336

 

Selling, general, and administrative expenses

 

 

185

 

 

 

147

 

 

 

368

 

 

 

335

 

Impairment of goodwill and intangible assets

 

 

 

 

 

 

 

 

 

 

 

208

 

Operating income (loss)

 

 

47

 

 

 

27

 

 

 

45

 

 

 

(207

)

Interest expense, net

 

 

14

 

 

 

14

 

 

 

29

 

 

 

28

 

Loss on extinguishment of debt

 

 

9

 

 

 

 

 

 

9

 

 

 

 

Investment income and other, net

 

 

(6

)

 

 

(11

)

 

 

(9

)

 

 

(14

)

Other expense, net

 

 

17

 

 

 

3

 

 

 

29

 

 

 

14

 

Income (loss) before income taxes

 

 

30

 

 

 

24

 

 

 

16

 

 

 

(221

)

Income tax provision (benefit)

 

 

9

 

 

 

(12

)

 

 

3

 

 

 

(63

)

Net income (loss)

 

$

21

 

 

$

36

 

 

$

13

 

 

$

(158

)

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.09

 

 

$

0.18

 

 

$

0.06

 

 

$

(0.93

)

Diluted

 

$

0.09

 

 

$

0.17

 

 

$

0.06

 

 

$

(0.93

)

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

201

 

 

 

169

 

 

 

197

 

 

 

170

 

Diluted

 

 

206

 

 

 

176

 

 

 

202

 

 

 

170

 

 

See notes to condensed consolidated financial statements.

4

 


 

APi Group Corporation

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(In millions)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net income (loss)

 

$

21

 

 

$

36

 

 

$

13

 

 

$

(158

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair value change - derivatives, net of tax (expense) benefit of ($3), $1, ($3), and $10, respectively

 

 

9

 

 

 

(3

)

 

 

8

 

 

 

(30

)

Foreign currency translation adjustment

 

 

4

 

 

 

6

 

 

 

 

 

 

 

Comprehensive income (loss)

 

$

34

 

 

$

39

 

 

$

21

 

 

$

(188

)

 

See notes to condensed consolidated financial statements.

5

 


 

APi Group Corporation

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)

(In millions, except share amounts)

 

 

 

Preferred Shares Issued

and Outstanding

 

 

Common Shares Issued

and Outstanding

 

 

Additional

Paid-In

 

 

Accumulated

 

 

Accumulated

Other

Comprehensive

 

 

Total

Shareholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Equity

 

Balance, December 31, 2020

 

 

4,000,000

 

 

$

 

 

 

168,052,024

 

 

$

 

 

$

1,856

 

 

$

(284

)

 

$

(14

)

 

$

1,558

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8

)

 

 

 

 

 

(8

)

Fair value change - derivatives

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

(1

)

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4

)

 

 

(4

)

Preferred Share dividend

 

 

 

 

 

 

 

 

12,447,912

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Warrants exercised

 

 

 

 

 

 

 

 

19,994,203

 

 

 

 

 

 

230

 

 

 

 

 

 

 

 

 

230

 

Profit sharing plan contributions

 

 

 

 

 

 

 

 

630,109

 

 

 

 

 

 

13

 

 

 

 

 

 

 

 

 

13

 

Share-based compensation and other, net

 

 

 

 

 

 

 

 

157,979

 

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

3

 

Balance, March 31, 2021

 

 

4,000,000

 

 

$

 

 

 

201,282,227

 

 

$

 

 

$

2,102

 

 

$

(292

)

 

$

(19

)

 

$

1,791

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21

 

 

 

 

 

 

21

 

Fair value change - derivatives

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

 

 

 

9

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

 

 

4

 

Share-based compensation and other, net

 

 

 

 

 

 

 

 

(1,140

)

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

3

 

Balance, June 30, 2021

 

 

4,000,000

 

 

$

 

 

 

201,281,087

 

 

$

 

 

$

2,105

 

 

$

(271

)

 

$

(6

)

 

$

1,828

 

 

 

 

Preferred Shares Issued

and Outstanding

 

 

Common Shares Issued

and Outstanding

 

 

Additional

Paid-In

 

 

Accumulated

 

 

Accumulated

Other

Comprehensive

 

 

Total

Shareholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Equity

 

Balance, December 31, 2019

 

 

4,000,000

 

 

$

 

 

 

169,902,260

 

 

$

 

 

$

1,885

 

 

$

(131

)

 

$

3

 

 

$

1,757

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(194

)

 

 

 

 

 

(194

)

Fair value change - derivatives

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(27

)

 

 

(27

)

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6

)

 

 

(6

)

Share cancellations

 

 

 

 

 

 

 

 

(608,016

)

 

 

 

 

 

(6

)

 

 

 

 

 

 

 

 

(6

)

Share-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

Balance, March 31, 2020

 

 

4,000,000

 

 

$

 

 

 

169,294,244

 

 

$

 

 

$

1,880

 

 

$

(325

)

 

$

(30

)

 

$

1,525

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

36

 

 

 

 

 

 

36

 

Fair value change - derivatives

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3

)

 

 

(3

)

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

 

 

6

 

Share-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

Balance, June 30, 2020

 

 

4,000,000

 

 

$

 

 

 

169,294,244

 

 

$

 

 

$

1,881

 

 

$

(289

)

 

$

(27

)

 

$

1,565

 

 

See notes to condensed consolidated financial statements.

6

 


 

APi Group Corporation

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In millions)

 

 

 

Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

13

 

 

$

(158

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

39

 

 

 

41

 

Amortization

 

 

63

 

 

 

103

 

Impairment of goodwill and intangible assets

 

 

 

 

 

208

 

Deferred taxes

 

 

(1

)

 

 

(50

)

Share-based compensation expense

 

 

6

 

 

 

2

 

Profit-sharing expense

 

 

7

 

 

 

6

 

Non-cash lease expense

 

 

16

 

 

 

14

 

Loss on extinguishment of debt

 

 

9

 

 

 

 

Other, net

 

 

4

 

 

 

2

 

Changes in operating assets and liabilities, net of effects of business acquisitions:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(24

)

 

 

78

 

Contract assets

 

 

(42

)

 

 

(1

)

Inventories

 

 

(5

)

 

 

(3

)

Prepaid expenses and other current assets

 

 

(2

)

 

 

(28

)

Accounts payable

 

 

30

 

 

 

 

Accrued liabilities and income taxes payable

 

 

(54

)

 

 

2

 

Contract liabilities

 

 

13

 

 

 

44

 

Other assets and liabilities

 

 

(53

)

 

 

(28

)

Net cash provided by operating activities

 

 

19

 

 

 

232

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Acquisitions, net of cash acquired

 

 

(12

)

 

 

(5

)

Purchases of property and equipment

 

 

(34

)

 

 

(17

)

Proceeds from sales of property, equipment, held for sale assets, and businesses

 

 

11

 

 

 

6

 

Net cash used in investing activities

 

 

(35

)

 

 

(16

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from long-term borrowings

 

 

350

 

 

 

1

 

Payments on long-term borrowings

 

 

(318

)

 

 

(11

)

Payments of debt issuance costs

 

 

(4

)

 

 

 

Proceeds from warrant exercises

 

 

230

 

 

 

 

Payments of acquisition-related consideration

 

 

(70

)

 

 

(86

)

Restricted shares tendered for taxes

 

 

(1

)

 

 

 

Net cash provided by (used in) financing activities

 

 

187

 

 

 

(96

)

Effect of foreign currency exchange rate change on cash and cash equivalents

 

 

3

 

 

 

1

 

Net increase in cash and cash equivalents

 

 

174

 

 

 

121

 

Cash, cash equivalents, and restricted cash, beginning of period

 

 

515

 

 

 

256

 

Cash, cash equivalents, and restricted cash, end of period

 

$

689

 

 

$

377

 

Supplemental cash flow disclosures:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

22

 

 

$

25

 

Cash paid for income taxes, net of refunds

 

 

45

 

 

 

11

 

Accrued contingent consideration issued in business combinations

 

 

1

 

 

 

1

 

Shares issued to profit sharing plan

 

 

13

 

 

 

 

 

See notes to condensed consolidated financial statements.

7

 


 

APi Group Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Amounts in millions, except shares and where noted otherwise)

 

NOTE 1.  NATURE OF BUSINESS

APi Group Corporation (the “Company” or “APG”) is a market-leading business services provider of safety, specialty, and industrial services in over 200 locations, primarily in North America and Europe.

NOTE 2.  BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The accompanying interim unaudited condensed consolidated financial statements (the “Interim Statements”) include the accounts of the Company and of its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. These Interim Statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and do not include all of the information and footnotes required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) for complete financial statements. The unaudited condensed consolidated balance sheet as of December 31, 2020 was derived from audited financial statements for the year then ended but does not include all of the information and footnotes required by U.S. GAAP with respect to annual financial statements. In the opinion of management, the Interim Statements include all adjustments (including normal recurring accruals) necessary for a fair presentation of the Company’s consolidated financial position, results of operations and cash flows for the dates and periods presented. It is recommended that these Interim Statements be read in conjunction with the Company’s audited annual consolidated financial statements and accompanying footnotes thereto for the year ended December 31, 2020. Results for interim periods are not necessarily indicative of the results to be expected for a full fiscal year or for any future period.

 

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include cash on hand and highly liquid investments that have a maturity of three months or less when purchased. Restricted cash reflects collateral against certain bank guarantees. Restricted cash is reported as prepaid expenses and other current assets and other assets in the unaudited condensed consolidated balance sheets. 

Investments

The Company holds investments in joint ventures which are accounted for under the equity method of accounting as the Company does not exercise control over the joint ventures. The Company’s share of earnings from the joint ventures was $1 and $5 during the three months ended June 30, 2021 and 2020, respectively, and $2 and $7 during the six months ended June 30, 2021 and 2020, respectively. The earnings are recorded within investment income and other, net in the unaudited condensed consolidated statements of operations. The investment balances were $8 and $9 as of June 30, 2021 and December 31, 2020, respectively, and are recorded within other assets in the unaudited condensed consolidated balance sheets.

NOTE 3.  RECENT ACCOUNTING PRONOUNCEMENTS

See the recent accounting pronouncements discussion below for information pertaining to the effects of recently adopted and other recent accounting pronouncements as updated from the discussion in the Company’s 2020 audited consolidated financial statements included in the Company’s Form 10-K filed on March 24, 2021.

Accounting Standards Issued and Adopted:

In January 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (“ASU 2020-01”) to clarify the interaction in accounting for equity securities under Topic 321, investments accounted for under the equity method of accounting in Topic 323, and the accounting for certain forward contracts and purchased options accounted for under Topic 815. ASU 2020-01 is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2020 with early adoption permitted. The Company adopted this ASU on January 1, 2021 and it did not have a material impact on its consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which eliminates certain exceptions to the existing guidance for income taxes related to the approach for intra-period tax allocations, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside

8

 


 

basis differences. This ASU also simplifies the accounting for income taxes by clarifying and amending existing guidance related to the effects of enacted changes in tax laws or rates in the effective tax rate computation, the recognition of franchise tax, and the evaluation of a step-up in the tax basis of goodwill, among other clarifications. ASU 2019-12 is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2020 with early adoption permitted. The Company adopted this ASU on January 1, 2021 and it had no impact on its consolidated financial statements.

NOTE 4.  BUSINESS COMBINATIONS

The Company continually evaluates potential acquisitions that strategically fit within the Company’s existing portfolio or expand the Company’s portfolio into a new and attractive business area. Acquisitions are accounted for as business combinations using the acquisition method of accounting. As such, the Company makes a preliminary allocation of the purchase price to the tangible assets and identifiable intangible assets acquired and liabilities assumed. In the months after closing, as the Company obtains additional information about the acquired assets and liabilities and learns more about the newly acquired business, it is able to refine the estimates of fair value and more accurately allocate the purchase price. Purchase price is allocated to acquired assets and liabilities assumed based upon their estimated fair values as determined based on estimates and assumptions deemed reasonable by the Company. The Company engages third-party valuation specialists to assist with preparation of critical assumptions and calculations of the fair value of acquired intangible assets in connection with significant acquisitions. The excess of the purchase price over the tangible and intangible assets acquired and liabilities assumed is recorded as goodwill. Goodwill is attributable to the workforce of the acquired businesses, the complementary strategic fit and resulting synergies these businesses bring to existing operations, and the opportunities in new markets expected to be achieved from the expanded platform.

2021 Acquisitions

During the first six months of 2021, the Company completed several individually immaterial acquisitions for consideration transferred of $13, made up of cash paid at closing of $12 and accrued consideration of $1. The results of operations of these acquisitions are included in the Company’s unaudited condensed consolidated statement of operations from their respective dates of acquisition and were not material.

2020 Acquisitions

During 2020, the Company completed the acquisition of SK FireSafety (“SKG”) within the Safety Services segment and a number of other immaterial acquisitions for consideration transferred of $324, which includes a cash payment made at closing of $319, net of cash acquired, and $5 of accrued consideration that may be paid out in 1-2 years.

SKG is a European market-leading provider of commercial safety services with operations primarily in the Netherlands, Belgium, Sweden, Norway, and the United Kingdom. On October 1, 2020, the Company completed the SKG Acquisition and acquired all of the outstanding stock. Through the acquisition of SKG, APG established a European platform for international organic and acquisition expansion. The other acquisitions were primarily in the Safety Services segment and based in the United States.

The Company has not finalized its accounting for all 2020 acquisitions that occurred during the fourth quarter of 2020. The areas of the purchase price allocation not yet finalized are primarily related to SKG and include the valuation of intangible assets and goodwill and income tax related matters. The Company will make appropriate adjustments to the purchase price allocation prior to completion of the measurement period, as required. During Q2 2021, we recorded a measurement period adjustment, primarily related to intangible assets and goodwill, for which the resulting impact to amortization expense was immaterial. Based on preliminary estimates, the total amount of goodwill from the 2020 acquisitions expected to be deductible for tax purposes is $20. See Note 6 – “Goodwill and Intangibles” for the provisional goodwill assigned to each segment.

 

9

 


 

 

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the dates of acquisition:

 

Cash paid at closing

 

$

329

 

Deferred consideration

 

 

5

 

Total consideration

 

$

334

 

 

 

 

 

 

Cash

 

$

10

 

Other current assets

 

 

76

 

Property and equipment

 

 

12

 

Customer relationships

 

 

82

 

Trade names and trademarks

 

 

16

 

Contractual backlog

 

 

1

 

Goodwill

 

 

215

 

Other noncurrent assets

 

 

14

 

Current liabilities

 

 

(54